THIRUNAVAKARASU v. SIRIWARDENA AND OTHERS

019-SLLR-SLLR-1981-1-THIRUNAVAKARASU-v.-SIRIWARDENA-AND-OTHERS.pdf


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thirunavakarasu
V.
SIRIWARDENA AND OTHERS
SUPREME COURT
SAMARAWICKREMA J, ISMAIL J. AND WANASUNDERA J.
S. C. 33/80 C. A. APPLICATION NO. 669/78
C. A. (L. A.) NO. 14/80 S. C. JANUARY 22ND AND 23.1981.
Writs — Certiorari and Mandamus — S 20(1) and s 34 Industrial Disputes Act — Inter-pretation of Award — Failure to quantify award — Jurisdiction — Regulation 29 madeunder Industrial Disputes Act — Right of arbitrator to correct clerical and arithmeticalerror —Repudiation.
Regulation 29 (made under the Industrial Disputes Act) allows an arbitrator to correctany clerical or arithmetical error in the award. This is a merely ministerial or adminis-tration act andean be exercised ex mero motu by the tribunal and in the absence of theparties. On other hand the powers given by s 34 of the Industrial Disputes Act are marked-ly different and can only be exercised by the Tribunal upon a reference by the Commi-ssioner or one of the interested parties. The section contemplates a "decision" on thepart of the Tribunal upon such reference. If, for any reason, the matter cannot be re-ferred to the original Tribunal, it must go to an Industrial Court. The decision mustfollow a hearing. A hearing is essential and can be dispensed with only upon the consentof the parties. Section 34 clearly envisages proceedings of a quasi-judicial nature. Itpermits interpretation of the original award. It enables the arbitrator to quantify theback wages ordered in the original award and so make a supplementary award.
What an award seeks to do is to resolve the dispute by formulating a new set of termsand conditions, which are fair and reasonable to both parties and imposing such termson the parties so that these terms and conditions will supersede the original position ofthe parties and provide a new relationship that would henceforth guide the conduct ofthe parties. These terms and conditions are statutorily made implied terms in the cont-ract of employment. The award will additionally be operative for a minimum period oftwelve months. The law allows a repudiation at any time after the required minimumperiod but such repudiation can have only prospective application and cannot affectany rights and obligations that have already accrued to the parties. From and. after thedate of repudiation the parties are freed from the constraints and fetters of the awardand the parties may order their affairs like any other employer or employee but any'change can only be effected from the prevailing position — the terms and conditionsthen subsisting (including those that came in by way of the award) necessarily formingthe starting point.
(11 Commercial Banks Association v Thalgodapitiya — 60 N L R 241
12) South Indian Bank v Checko (1964) Labour Law Journal 19
® Yamuna Mills Co.'Ltd. v.Majoor Mahajan Mandat (1957) (1) Labour Law Journal
620.
Bilash Chandra Mitra v. Balmer Lawrie & Co. Ltd A I R 1953 Cal. 613.
J. C. Adak v. Mukherjee AIR 1950 Cal. 577.
• (6) Mangaladas Narandas v Payment of Wages Authority (1957) (11) Labour LawJournal 256.
(7) Workmen of Andra Bank Ltd v.Andra Bank Ltd (1964) (1) Labour Law Journal243.
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Appeal from judgment of the Court of Appeal.
V. S. A. Pullenayagam with S. C. Chandrahasan and Miss Mangalam Kanapathipillai forpetitioner-appellant;
1st respondent-respondent not represented.
Nimal Senanayat s with Miss S. M. Senaratne and Mrs A. B. Dissanayake for the 2ndrespondent-respondent.
Douglas Premaratne, Senior State Counsel with K. C. Kamalasabayson, State Counselfor 3rd respondent-respondent.
Cur. adv. vult.
March 12,1981
WANASUNDERA, J.
This is an appeal from a Judgment of the Court of Apeal refus-ing the application of the appellant for the issue of Mandates in thenature of Writs of Certiorari and Mandamus to quash an award ofthe 1st respondent who functioned as an arbitrator under theIndustrial Disputes Act.
In February 1973, the appellant-employer had terminated theservices of six workmen (who are represented in these proceedingsby their Union, the 2nd respondent) on the grounds of insubordina-tion and absenteeism. Upon representation made to him, theMinister in terms of section 4.of the said Act referred this disputeto the 1st respondent for settlement by arbitration. The awardof the 1st respondent was made on 5th November 1975 and waspublished in the Gazette of 5th December 1975.
The award was to the effect that four of the workmen shouldbe reinstated with full back wages during the period of non-emp-loyment. Another one was also to be reinstated, but with half backwages. The sixth workman was to be reinstated without the pay-ment of back wages. In his case, however, the employer was giventhe choice of keeping him or terminating his services upon the pay-ment of compensation.
The appellant sought to quash this award by an application fora Mandate in the nature of a writ of Certiorari. In June 1977, theSupreme Court refused his application. The workmen were there-after reinstated, but the appellant refused to pay the back wagesdeclared by the award. The appellant's excuse is that the award isdefective inasmuch as the arbitrator had failed or neglected tocompute the actual amount he was liable to pay.
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On 4th November 1977, the appellant, acting in terms of theprovisions of section 20(1) of the Act, gave written notice to theCommissioner of Labour and the respondent Union repudiatingthe award. In terms of this section, the award comes to an end onlyupon three months succeeding the month in which the notice isreceived by the Commissioner of Labour, and that would be from1st March 1978.
In December 1977, that is while the award was still operativeand awaiting the repudiation taking effect, the 2nd respondentUnion, acting in terms of section 34, made an application to thearbitrator seeking an interpretation of the award. This was pre-sumably done to have the matter of back wages elucidated.
The appellant objected to these proceedings and he madeanother application to the Court for a Mandate in the nature of aWrit of Prohibition to prevent the arbitrator from embarking onany such inquiry. This petition was numbered S. C. ApplicationNo. 206/78.
The arbitrator who had already taken some steps to hold aninquiry proceeded with the inquiry since further proceedings byhim were not restrained by any order of court. After inquiry onthe 1st of September 1978, the arbitrator made an order quantify-ing the amounts which were due as back wages to these workmen.
The appellant has now made a further application to quash this"supplementary award”. The present application and applicationNo. S. C. 206/78 were taken up together by the Court of Appeal.The two grounds urged before us by Mr. Pullenayagam were alsothe basis of the submissions before that Court.
The first ground relates to the interpretation of the provisionsof section 34. More specifically it turns on the correct meaning tobe assigned to the words MInterpretation of any award”, in thatsection. Mr. Pullenayagam contended that the "Interpretation ”
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permitted by section 34 was a restricted power. He seeks supportfor his submission ir. the ordinary meaning of the word 'interpret'and submits that this restricted power does not enable the arbitra-tor to quantify the back wages as he sought to do in this case.
Mr. Pullenayagam's second submission is more substantial innature. It challenges the jurisdiction of the arbitrator to make the"supplementary award". This is the manner in which he has reason-ed it out. The "supplementary award" is by section 34(2) " deemedto form part of and shall have the same effect in all respects as theoriginal award". Since the original award ceased to be operativewith effect from 1st March 1978, the arbitrator had no authority,subsequent to that date, to engage in the interpretation of an awardwhich was now null and void.
The Court of Appeal has held against the appellant on boththese grounds.
Our attention has been drawn to regulation 29 made under theIndustrial Disputes Act and the decision in Commercial BankAssociation v. Thatgodapitiya[1 * which relates to the first ground.There are no local decisions touching the second ground and thematter as far as we are aware is res integra.
Regulation 29 allows an arbitrator to correct any clerical orarithmetical error in the award. Mr.. Premaratne, Senior State .Counsel, has quite rightly compared this regulation with the powergiven to a Court by section 189, Civil Procedure Code, to correctclerical or arithmetical errors or any error arising from an accidentalslip or omission. The powers given here are merely ministerial oradministrative in nature and can be exercised ex mero motu by thetribunal and* in the absence of the parties. On the other hand, thepower given by section 34 of the Industrial Disputes Act is marked-ly different. Under section 34 of the Act, the power can only beexercised by the Tribunal upon a reference by the Commissioner orone of the interested parties. The section contemplates a "decision"on the part of the Tribunal upon such reference. If, for any reason,the matter cannot be referred to the original Tribunal, it must go toan Industrial Court. The decision must follow a hearing and ahearing is essential and can be dispensed with only upon theconsent of the parties. Section 34 clearly envisages proceedings of a
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quasi-judicial nature. The very fact that there exists another pro-vision for the correction of clerical or arithmetical errors in regu-lation 29 is sufficient to indicate the wider scope of the powersof section 34.
Let me now see whether the restricted meaning of the word“interpretation"given by Mr. Pullenayagam adequately fits thecontext of section 34. The dictionary meaning or the word“interpretation” is “the action of interpreting or explaining:explanation, exposition”. And the word interpret is defined as “toexpound the meaning of (something abstruse or mysterious); torender (words, writings or author etc.) clear or explicit; to elucid-ate, to explain". In fact one of the first examples given in the use ofthe Jvord is "Interpretation of Nature" a phrase used by Bacon todenote the discovery of natural laws by means of induction. Itwill be observed that these meanings are consonant with whatwe understand by the term 'interpretation' in the legal sphere.
Courts when called upon to interpret statutes and documentsare permitted to look at extraneous material. The functions of acourt cannot be equated to that of a mechanical instrument whichmerely reproduces faithfully and impersonally something that hasbeen pre-recorded. It is now generally admitted that courts have andoften do play a creative role in exercise of their functions. If au-thority is needed to show the use of this term in its wider context,one has only to think of cases like Heydon's case or of statutes andreputed texts which recognise the right of a court to admit extri-nsic material in aid of interpretation. In such contexts we find thatthe term interpretation is used to describe that exercise. VidePhipson: Evidence, 8th Edn., Chapter XLVI.
Turning from these general observations to the facts of the pre-sent case I find that it bears close similarity to the facts in the caseof Commercial Bank Association v. Thalgodapitiya. (supra) In thatcase the Commissioner of Labour referred for .settlement by arbitra-tion an industrial dispute relating to certain superannuationschemes. The arbitrator in his award had formulated two separateschemes—one in respect of pensions and the other for a providentfund. As regards the provident fund scheme, the arbitrator hadspecified the date on which it should come into force; but due to
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inadvertence, he failed to specify a date for the commencement ofthe pension scheme.
The matter was referred back to the arbitrator in terms ofsection 34 and the arbitrator stated that he had intended thepension furid scheme also to start from the same date as theprovident fund scheme. It was sought to argue that the arbitratorhad misconstrued section 34 and had acted contrary to theprovisions of section 18(2) which deals with the date the awardcomes into force. It would appear that the point now taken up byMr Pullenayagum was not an argument put forward in that case.Weerasooriya, J., however, in the course of his judgment went on tomake certain observations about the scope of section 34. He said:
"The Act does not contain express provision for the correc-tion or modification of an award once it has been made. Suchprovision is contained in section 14 of the Arbitration Ordi-nance (Cap. 83) and section 687 and 688 of the Civil ProcedureCode. But section 21 of the Act providesthat neither the Arbi-tration Ordinance nor the provisions of the Civil Procedure Coderelating to arbitration shall apply to proceedings before an arbi-trator under the Act. Notwithstanding the absence of expressprovision in the Act for the correction or modification of anaward. I am unable to take the view that an award once mademust remain unalterable even in respect of obvious errors andomissions. It seems to me thajt an arbitrator to whom an award 'is referred for interpretation under section 34(1) of the Act isentitled to correct such errors and omissions in the awardin giving his decision on any question submitted to him."
At the date of this decision, regulation 29 had not been enactedand the absence of such a provision has obviously influenced thesedicta. The provision of section 34 are no doubt circumscribed andmust be interpreted within limits, but Justice Weerasooriya appearsto have taken an unduly narrow view of these provisions almostequating them to regulation 29.1 have already contrasted these twoprovisions and sought to show that they are mutually exclusive andshould operate as such.
Justice Weerasooriya was loth to inquire into the correspondingposition where arbitration under the civil law was concerned. I
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think such a comparison could be useful bearing in mind no doubtthat there are some differences between such civil law arbitrationand industrial arbitration. An industrial arbitrator has much widerpowers both as regards the scope of the inquiry and the kind oforders he can make than an arbitrator in the civil law. In short wecan fairly say that arbitration under the Industrial Law is intend-ed to be even more liberal, informal and flexible than commercialarbitration. And.the effect of section 21 of the Industrial DisputesAct is to indicate that even the rules relating to arbitration in thecivil law should not be allowed to trammel the powers of inquirygiven to an arbitrator under the Act. Nevertheless, some of thebasic principles and concepts of arbitration are common to both.While it is true that the Industrial Disputes Act expressly statesthat the provisions relating to arbitration under the civil law areinapplicable, a comparison of these provisions should no doubtbe helpful and enable us to take our bearings and to accord to in-dustrial arbitration a latitude even greater than what now obtainsin arbitration under the civil law.
But under the Civil Procedure Code and the Arbitration Ordina-nce (Cap. 98), there are wide-ranging provisions for amendmentsand corrections to be made in an award. Section 14 of the Arbitra-tion Ordinance reads:
“The court may, on the application of either party, modifyor correct an award, where it appears that a part of the awardis upon matters not referred to the arbitrators (provided thatsuch part can be separated from the other part and does notaffect the decision on the matter referred), or where the awardis imperfect in form, or contains any obvious* error which canbe amended without affecting such decision. The court mayalso, on such application, make such order as it thinks justrespecting the costs of the arbitration, if any question ariserespecting such costs and the award contains no sufficientprovision concerning them.".
Section 15 provides for remitting the award back to the arbitrator.It reads:
“In any of the following cases the court shall have power toremit the award or any of the matters referred to arbitration to
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the reconsideration of the same arbitrators or umpire, uponsuch terms as it may think proper, that is to say:
if the award has left undetermined some of the matters
referred to arbitration, or if it determine matters not
referred to arbitration;
if the award is so indefinite as to be incapable'of execu-
tion;
if an objection to the legality of the award is apparent
upon the face of the award."
The corresponding provisions of the Civil Procedure Code are sec-tions 688 to 690.
Coming back to the present case, we find that the arbitrator hasordered back wages for the period of non-employment. The wagesincluding allowances are generally ascertainable from the pay sheetand about which there could be little likelihood of contention. Atthe second inquiry these matters appear to have been agreed uponas revealed by the arbitrator's order:
"As regards the amounts payable to the workmen concernedup to the date on which they were to be reinstated accordingto the award, there is no dispute between the parties."
In the case of Commercial Bank Association v. Thalgodapitiya(supra), a date which was in the mind of the arbitrator of whichthere was no specific indication in the written record came to beinserted as a correction. In the present case, the correction of theaward involves a pure arithmetical exercise, namely the calculationof the sum concerned which has to be arrived at by multiplying tworeadily available figures, i. e. the amount of wages into the numberof months that were relevant. The results arrived at correspondexactly to the determination in the award and is now spelled outnumerically and in no wise go beyond it or fall short of it. In •these circumstances, could one say that the arbitrator acted unrea-sonably or that he ought not to have acted in the manner he hasdone, or that his action falls outside the provisions of section 34 ?For the above reasons I am unable to accept the argument sub-mitted to me by the appellant and this ground therefore fails.
The second submission of Mr. Pullenayagam is a matter of somecomplexity and we have been informed that there are no local de-cisions dealing with the question. The question that has been posedis whether or not an award once it is repudiated has the effect, as itwere, of wiping the slate clean so that the award and its effects will
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disappear altogether as if-they had never existed from the inception.I must confess that I find it difficult to accept this argument bothon principle and practice. I do not think it can be seriously con-tended that in respect of the factual position relating to such anaward that facts and events that had already transpired could bewished away and made to disappear in this manner. The view thatany rights and obligations created and subsisting under an awardwould also be rendered null and void from their inception byvirtue of a repudiation, is based on a similar misconception. Tofind an answer to this question we need go to the roots of industrialarbitration and try to understand what it signifies.
The Industrial Disputes Act provides for State interventionin the resolution of disputes between management and workmen.The procedures that are devised therein for the settlement ofindustrial disputes are founded on a view that such disputes reachbeyond the interests of the contesting parties and are matters ofreal concern to the community at large.
The award in the case of an arbitration therefore is not intendedto be a respite and to provide a temporary breathing space leavingthe parties free thereafter to reopen the disputes. No; the award isintended to be a true settlement of the existing dispute and thatsettlement is made binding on the parties with the sanction of theaward behind it. What the award seeks to do is to resolve thedispute by formulating a new set of terms and conditions, which arefair and reasonable to both parties, and imposing such terms on theparties so that these terms and conditions will supersede the originalposition of the parties and provide a new relationship that wouldhenceforth guide the conduct of the parties. These terms and con-ditions are statutorily made implied terms in the contract of em-ployment. In addition to that, the award will be binding on theparties and is made operative in its character of an award for aminumum period of twelve months. This means that there aresome special sanctions, including criminal sanctions to back theaward in its character as an award. During that period and in respectof that period when the award will subsist,.all rights and liabilitiespertaining to- the award in its character as an award can be enforcedas an award.
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The law no doubt allows a repudiation of the award at any timeafter the required minimum period. What then is the effect of sucha repudiation? In my view such a repudiation can have only prospe-ctive application and cannot affect any rights and obligations thathave already accrued to the parties and have become terms and con-ditions of service. From and after the date of repudiation the par-ties are freed from the constraints and fetters of the award in itsnature as an award. Henceforth the parties would be at liberty toorder their affairs like any other employer or employee but – andthis is important—any change that is.sought can only be effectedfrom the prevailing position; by this I mean that the terms andconditions then subsisting (which will include those that came in byway of the award) must necessarily form the starting point. Arepudiation of an award in my view can never result in a goingback to the contentious position of the parties which hadoriginally prevailed at the time of the dispute. To do so wouldbe to devalue the concept of arbitration altogether and to makearbitral proceedings an almost useless exercise.
In this connection I observe that the Indian cases that I havebeen able to peruse appear to proceed on these same lines. In SouthIndian Bank v. Checko which is a judgment of the IndianSupreme Court, I find a . clear exposition of the legal positionrelating to this matter. The court observed:
"Quite apart from this, however, it appears to us that even ifan award has ceased to be in operation or in force and hasceased to be binding on the parties under the provisions ofS. 19(6), it will continue to have its effect as a contract betweenthe parties that has been made by industrial adjudication inplace of the old contract. So long as the award remains in opera-tion under S. 19(3), S. 23(c) stands in the way of any strike bythe workmen and lockout by the employer in respect of anymatter covered by the award. Again, so long as the award isbinding on a party, breach of any of its terms will make theparty liable to penalty under S. 29 of the Act, to imprisonmentwhich may extend to six months or with fine or with both.After the period of its operation, and also the period for whichthe award is binding have elapsed Ss. 23 and 29 can have nooperation. We can however see nothing in the scheme of theIndustrial Disputes Act to justify a conclusion that merely
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because these special provision as regards prohibition of strikesand lockouts and of penalties for breach of award cease to beeffective, the new contract as embodied in the award shouldalso cease to be effective. On the contrary, the very purpose forwhich industrial adjudication has been given the peculiarauthority and right of making new contracts betweenemployers and workmen makes it reasonable to think that eventhough the period of operation of the award and the period forwhich it remains binding on the parties may elapse—in respectof both of which special provisions have been made under Ss.23- and 29 respectively-may expire, the new contract wouldcontinue to govern the relations between the parties till it isdisplaced by another contract."
In Yamuna Mills Co. Ltd. Majoor Mahajan Mandl, JusticeTendolkar of the Bombay High Court had attempted to analysethe legal position between the employer and employee consequentoh a repudiation or termination of an award. He said as follows:
". . . But the question that we have been called upon to deter-mine goes a little further than that and the question is by whatis the relationship between the employers and he employeesregulated after an award is terminated? Does termination of theaward create a vacuum and leave the employees to the tendermercy of the employer? Does it, by providing that the awardshell cease to have effect, get rid of the award so as to bringabout the result that any agreement that governed the relationsof the parties prior to the date of the award is thereby revived;or does it preserve such rights as the employees have, prior tothe date of termination, already enjoyed under the award ordoes it preserve the whole of the award until it is changed bythe procedure prescribed by the Bombay Industrial RelationsAct for a change? Now, quite obviously it would not be possiblefor any court to take the view that the termination of the awardcreates a vacuum in which the employees are at the tender. mercy of the employer; nor does it appear to us to be possibleto hold that by the termination, of the award the contract oragreement that governed the relations of the employer and theemployees prior to the award is in some manner revived.Initially that contract or agreement had binding effect; but itceased to have such effect on the award taking effect and the
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moment the award became binding on the parties, the antece-dent contract or agreement was superseded by the award. It isnot a case of an antecedent contract or agreement being suspen-ded, because there is no provision for suspension which caneven be spelt out from any of the sections of the BombayIndustrial Relations Act. The award, or as the case may be, aregistered agreement or a settlement under the BombayIndustrial Relations Act, has obviously the effect of supersedingthe contract or agreement that existed and that regulated therelations between the employer and the employees prior to theregistered agreement, settlement or award taking effect underthe provisions of the Act. Then we come to the next possibility:Is only so much of the award preserved as relates to the rightsalready enjoyed by the employees before the termination of theaward? We find it difficult so to hold. There is no principle orlogic in dealing with an award in this piecemeal manner andpreserving rights that have already been actually, enjoyed anddestroying those which, although they may have accrued, haveto be enjoyed in future in terms of the award. Mr. P?tel for thepetitioners has argued that on the termination of the award theeffect or rather the result that is brought about is that the rightsof parties are frozen as of that date. Assuming such a concept offreezing the rights was adopted, even the freezing would be inrespect of rights that have already accrued and it is not quiteeasy to conceive of rights which would not accrue to anemployee under an industrial award and which can only becontingent. In any event, if the original contract or agreementhas been superseded by the award, holding that the award is nolonger what governs the relations between the employer and theemployees would necessarily create a vacuum. Trying to savethe creation of a vacuum by splitting up the award into twoparts, the award under which benefits have already beenenjoyed and that part of the award under which benefits havenot been enjoyed., is dissecting the award in a manner notjustified in law or logic. There appears to be on the scene afterthe termination of the award only one thing that can govern therelations between the employer and the employees and thatundoubtedly can be nothing else than the award itself. Theresult of the award ceasing to have effect is not that the awardceases to exist; the result of the award ceasing to have effect is,
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as I have already pointed out, that it is open to either party togive a notice of change and to attempt to bring about a change.Further, it is open to the employer in cases in which he can bringabout a change without a notice of change such as the mattersenumerated in Sch. Ill to proceed to bring about the change,because the impediment placed in his way by S. 46(3) isremoved. But until a change is brought about by the act eitherof the employer or the employee after following the relevantprovisions in the Bombay Industrial Relations Act, 1946, theaward that exists shall continue to regulate the relationsbetween the employer and employees."
In Bilash Chandra Mitra v. Balmer Lawrie & Co. Ltd. we findthat facts are somewhat similar to the case before us.
In that case the plaintiff, who was the employee, brought anaction in the civil court, claiming a declaration that he continuedto be in employment and for the recovery of pay and allowancesunder an award. The award had been made in consequence of anindustrial dispute in which the plaintiff alleged that he was wrong-fully retired from his post. The award had decreed reinstatementand the payment of salary and allowances commencing from thedate of such termination. The plaintiff however had neither beenreinstated nor paid his salary and allowances.
One of the objections taken in the case was that, since theplaintiff had not been reinstated, he cannot claim wages or salary,The Court said:
". … The Award declared that the plaintiff is reinstatedto his previous service and post with effect from the date onwhich the Award would become effective and as a conse-quence of reinstatement the plaintiff would get arrears of payand allowances. Further, a time limit was fixed within whichthe amount had to be paid. It is thus clear that nothing wasleft to be done by the defendant company. The plaintiff wasrestored to his service by the Award itself and he was declaredentitled to arrears of pay and allowances. There was automaticreinstatement by virtue of the Award. The Award fixed theliability of the company to pay the arrears of salary andallowances. In other words a sort of decree for a sum to becalculated arithmetically had been passed against the defendantand in favour of the plaintiff."
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Another objection that was taken was that relief by way ofordinary action did not lie and the proper mode of action wasrecovery under section 29 of the Industrial Disputes Act. In answer,the Court said:
"In the present case the plaintiff is not merely claiming thearrears of salary and allowance due up to the date of the Awardbut also salary and allowance which accrued due after theAward on the strength of the declaration as to reinstatementmade by the Award. In other words the plaintiff's claim extendsto or comprises further relief which flows from the Award. TheAward has created a debt in favour of the plaintiff and I fail tosee why payment of such debt cannot be enforced by suit. Thedebt has accrued from the relationship of the master andservant. It is a civil liability and for enforcement of such liabi-lity recourse can be had to an action in a civil court (S. 9 CivilP. C. ) though no doubt the remedy of proceedings for enforce-ment of the provisions of S. 29 of the Act is also available forpunishing the*person so liable."
The decision in J. C. Adak v. Mukherjee, is even more inpoint. In this case an award had been made under the provisionsof the Industrial Disputes Act declaring that the workman shouldbe paid dearness allowances at a certain rate. The awardwas binding on the parties and was operative for a period of oneyear. There was provision in the Act to reconsider the matter ifa material change occurs in the circumstances upon which theaward was based. Accordingly, while the award was still ineffect, such a reference was made and the Tribunal dealingwith it declared that the term imposed by the original awardhad by lapse of time become inoperative and sought to nullifythe award.
In an application to quash this second award, the respondenttook an objection somewhat similar to the one taken in by theappellant in the present case. The court said –
"On behalf of the respondent, it was contended that theaward of 15. 5. 1948 had ceased to be effective after25. 5. 1949 and, therefore, the modification of the award madeby the award of 20. 5. 1949 could not affect the interest of thepetitioner. Therefore, this Court should not make an orderwhich is of no benefit to the petitioner. This contention, I do
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not think, is right. It overlooks the fact that though the awardof 15. 5. 1948 had become ineffective by the passing of time,the rights flowing therefrom have not been wiped out. Theaward directed payment of certain dearness allowances which,if not paid, created a debt in favour of the workmen, and it wasa binding debt. The award binds the parties in the same way,as if the terms were agreed between them. In my view, the pay-ment of this debt can be enforced by a civil suit. It is a fallacyto say that the penalty clause in the Act bars such a suit."
The above case was cited with approval in Mangaldas Narandasv. Payment of Wages Authority,where the court said:
"When an award is delivered by the industrial tribunal it hasthe effect of imposing a statutory contract governing the rela-tions of the employer and the employee. It is true that statu-tory contract may be terminated in the manner prescribed bySub-sec. (6) of S. 19. After the statutory contract is terminatedby notice the employer by failing to abide by the terms of theaward does not incur the penalties provided by the IndustrialDisputes Act, nor can the award be enforced in the mannerprescribed by S. 20 of Industrial Disputes '(Appellate Tri-bunal) Act, 1950. But the termination of the award has, in ourjudgment, not the effect of extinguishing the rights flowingtherefrom. Evidently by the termination of the award the con-tract of employment is not terminated. The employer and theemployee remain master and servant in the industry in whichthey are engaged, unless by notice the employer has also simul-taneously with the termination of the award terminated theemployment of the employee. If the employment is not ter-minated, it is difficult to hold that the rights which had beengranted under the award automatically cease to be effectivefrom the date on which notice of termination of the awardbecomes effective. In our Judgment, the effect of terminationof the award is only to prevent enforcement of the obligationsunder the award in the manner prescribed, but the rights andobligations which flow from the award are not wiped out."Similar views have been expressed in Workmen ofAndra Bank Ltd.v. Andra Bank Ltd‘ *7
For the reasons set out above, this appeal fails and I wouldaccordingly dismiss it with costs. The appellant will pay to each of
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(1981) 1 S.L.R.
the 2nd and 3rd respondents half the amount at which the costs ofsuch party is assessed on taxation in respect of this appeal.
Mr. Senanayake complained that over five years have elapsedsince the date of the original award and the appellant, by successiveresort to the court, has succeeded till now in keeping these work-men away from what was rightly due to them. He expressed a fear,having regard to some remarks made at the hearing, that there maybe a likelihood of further obstacles being placed in his way. Thedecision we have now given places beyond doubt the continu-ing obligation of the appellant to pay these amounts to the work-men. Since no date appears to have been fixed for payment, toavoid technical advantage being taken of this and/or of the delayoccasioned by orders for stay of executions made by the courts, wewould, rn the exercise of our powers, order that they be paid to theworkmen on or before the 15th of May 1981. In view of this order,we hope that fears expressed by Mr. Senanayake will prove ground-less.
Samarawickrema, J.| agree
Ismail, J.I agree
Appeal dismissed